Flybe’s biggest shareholder threatens legal action over proposed £2m takeover

The biggest shareholder of Flybe is considering legal action over the cut-price takeover of the airline, having accused the company’s directors of breaching duties to investors.

London-based asset manager, Hosking Partners, owns 19 per cent of British airline Flybe and has asked lawyers to assess its options ahead of the proposed takeover from a consortium led by Virgin Atlantic, according to Sky News.

One possible option could be to impose an injunction that would block the sale from taking place.

The consortium agreed a 1p per share deal, which was announced eight days ago, but heavily undercut the share price of the company.

A letter to Flybe’s directors expressed concerns that the company had allowed a false market to develop by failing to notify the City of its financial position quickly enough, Sky News claim.

The letter was also copied to City watchdogs including the Takeover Panel and Financial Conduct Authority.

Hosking has also highlighted that the alleged handling of the proposed sale blocked a rival bid coming in with a higher offer.